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As mentioned before in my previous articles, there are all kinds of different investors around for the entrepreneur to choose from. We have already covered the types of investors there are, which can be business lenders, angel investors, institutional investors, or venture capitalists. This is just a broad range of investors that you might see. Once you have your business plan and your executive summary ready, you are now ready to seek the right investor to ask for capital.
There are several factors that you need to take into consideration before actually contacting your prospective investor. There are many things you need to look into, such as stage, industry, and Anthony Dohrmann Furthermore, you should also look at their portfolio companies, who they are and what they do. You will see all of this below.
Basically, stage refers to the stage that your company is in. If you are pre-prototype, or your prototype has just been developed, you are either seed stage or early stage. These stages are usually the highest risk stages for investors, but their ROI, or return on investment could be very high. On the other hand if your company is at a later stage and already has a regular flow of clients, the risk is generally lower to the investor. If your company is either seed or early stage, you will need an investor who is more than likely a venture capitalist and specializes in high risk investments. On the other hand, if you are a company that is already established and needs bridge funding or expansion funding, you need an investment firm or a private equity firm that specializes in the later stages of a company's life. This means that you will need an investor, who's Investor,Investment is either later stage, growth or expansion stage, or mezzanine stage. These are usually stages of companies who are ready for a liquidation event, where the investors exit and make their profits. This means that these companies can be either involved in a leveraged buyout or LBO, or a managed buyout or MBO. Mezzanine stage is when a company is ready for mezzanine capital. This is the capital a company needs as it prepares for an IPO or initial public offering. This is also a liquidation event.
Geographic preference is equally as important as an investor's stage preference. Your company may fit an investor's stage preference, but you may not be in the right geographic location that a particular investor might invest in. There are different investors throughout the world and the smaller firms might just invest in a particular geographic location, whereas some of the larger global investment firms will invest internationally. Other investors may invest in an entire continental area, for example Uncle Vasya Ventures may invest in Eurasia, which would encompass Russia, Central Asia, the countries that make up the former republics of the Soviet Union and Eastern Europe and Aunt Valya Private Equity might invest only within continental Europe. When seeking an investor, you should find out where their geographic preference is. Sometimes this is shown on their websites, and sometimes not. A good way to figure out what geographic location an investor prefers is by looking at its portfolio companies and the countries where they are located.
Industry preference is just as important as the both above mentioned preferences. Usually investors invest in the industries that their partners or portfolio companies have expertise in. When looking for an investor, you need to look at the industry that you are in and you want to have an investor who has the expertise in the same industry that you are in. You could have an excellent product, but if you are in the IT industry and you contact a VC firm that makes its investments in the pharmaceuticals industry, your executive summary will not be looked at.
Determining an investor's industry preference can be done by first looking at their portfolio companies, and sometimes, the industry preferences are shown on investors' website. If you look at an investor's portfolio, and see what the industries that the portfolio companies are involved in, you can get a glimpse of what Security Systems a given investor might have. It's important that you find an investor who's preferences meet your company profile.
Another important factor you need to look at when choosing an investor is whether the investor is actively investing or not. You can usually do this by looking for any press releases that most investors usually have on their websites under links with the title "SoSo Investments in the News," etc. This is an archive of all the active that particular vc firm has done and has been covered in the press. The key here is that if there is no fresh press release issued from that vc firm within a year, that means that that particular investor might not be actively investing at this time. You need to know whether the investor is active. If the investor is not active, there is no sense in sending your company information to him.
Learn more here on: LaserShield
How to Get the Latest Scoop on Investors
Trying to find the latest information about investors can be very difficult if you are doing it on your own. There are many helpful resources online that can help you to get the latest information on over 4300 investors worldwide. I have used this system and I must say, I can't push it enough. A venture capital is a resource that I have trusted when searching for investors to fund my ventures. The database not only covers each individual investors, but also gives you their stage, industry, and geographic preferences. You can also easily contact these investors through the database.
Ivan Faucon writes about venture capital and entrepreneurs. He will also occasionally write about other business topics, such as consumer goods, jewelry, and internet marketing.
To know more details about press here: http://www.jian.com/blog-talk/business-black-belt-radio-anthony-doh...